People repaying HECS debts will also be out of pocket, as bonuses for upfront and voluntary payments are halved, while indexation of the debt continues to increase the money owed in line with CPI.
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The discount for upfront payment of university fees drops from 20per cent to 10per cent from today and the bonus for making voluntary payments of $500 or more falls from 10per cent to 5per cent.
People on disability pensions will face tougher criteria to qualify for assistance and many are predicted to lose their payment, while young parents also face losing their allowances if they fail to attend a Centrelink interview or complete mutual obligation requirements to study or look for work.
While those on Youth Allowance will receive a small increase to their payments, they are forced to live on just $28 a day.
Australian Council of Social Service chief executive Cassandra Goldie said while some disadvantaged and low-income Australians would be better off, many increases were negated by tougher conditions for entitlements.
''New impairment tables for Disability Support Pension and inadequate increases to Youth Allowance paid to young people could mean that it won't be a very happy new year for many people already doing it tough,'' she said.
''Stricter impairment tables are expected to dramatically reduce new successful claims for the Disability Support Pension. A recent government trial found that 38per cent of those currently qualifying would not do so under the tougher rules.
''Anyone not qualified will be moved on to the Newstart Allowance of $243, which is $131 per week less than the pension,'' she said.
Ms Goldie said, as well as job seekers dependant on Newstart Allowances, full-time students relying on Youth Allowance would also remain below the poverty line.
''The rate of Youth Allowance for a single person [over 18] living away from home increases to $201 a week, a rise of just $7,'' she said.
''Youth Allowance is $42 a week less than Newstart Allowance and $173 a week less than the pension.''
National Welfare Rights Network president Maree O'Halloran said Youth Allowance and Newstart Allowance payments left little money each week for recipients to cover basic costs, such as food and education materials.
''Many people are surviving on just $28 a day on these payments,'' she said.
Both welfare groups want the Federal Government to review how payments to students are calculated, as well as the amount paid each fortnight. Ms Goldie said, ''Pensions and Newstart Allowance are indexed each March and September, but the rate for young people is adjusted in line with the Consumer Price Index just once a year.''
